Abstract
In the Ukraine, rather large capacities on output of steel and rolled steel
are available. The country the 8th greatest producer of steel and 5th of iron
in the world. The country exports up to 80% of production volume of its
ferrous metallurgy, including the whole range of the sector products: iron
ore, iron, ferroalloys, billet, slabs, skelp for pipes, rebar, wirerod,
sections, HR and CR flat steel in coils and sheets, pipes6 metalware articles,
coated steel, etc.
Share of Ukraine in ferrous metallurgy production of the CIS is very high:
Ukraine yields 37% of total CIS iron, 34% of CIS steel and 27% of CIS rolled
steel.
Ferrous metallurgy is basic sector of Ukrainian economy. It includes above 150
enterprises, including 16 mining and concentrating enterprises, 14
metallurgical combines and plants, 7 pipe plants, 10 metalware plants, 16
coal-tar chemical plants, 17 refractory plants, 3 ferroalloys plants, 23
secondary ferrous metals enterprises, as well as machine building, repair and
engineering enterprises.
Notice that, in the Ukraine, a share of ferrous metallurgy in industrial
output of the country is the greatest among countries of the former USSR,
around 25%; the sector gains above a third of the country export receipts in
hard currency.
Current standing of Ukrainian ferrous metallurgy is characterised by imperfect
structure and lag in technology from developed countries and even Russia. For
instance, in Ukraine, 43% of steel is produced by open-hearth rout, and only
34% is cast continuously. Range and shares of products of Ukrainian ferrous
metallurgy are inconsistent with world market demand. This Ukrainian sector
requires radical modernisation and reconstruction, as well as optimising
structure of range of final products. Productive assets are worn and obsolete:
by the end of 2006, depreciation of facilities operating exceeded 60%
(including 54% depreciation of coke-oven batteries, almost 90% of available
blast furnaces, open hearth furnaces and rolling mills; 26%-depreciation of
converters,), and the completely depreciated facilities yield above a half of
the country steel products.
In this case, Ukrainian government attempts to improve the situation by giving
various preferences, tax credits to metallurgical companies, decreasing duties
and tariffs for them. For instance, from mid-1999 to the end of 2001, a
large-scale experiment was conducted in Ukrainian metallurgy: giving
considerable tax and other privileges to the sector enterprises to overcome
crisis in the sector. The experiment allowed to restore partially working
capital of the enterprises and to begin their modernization. For instance, in
2000, the sector yielded 27% of Ukrainian GDP and 46% of export receipts.
Nevertheless, improving standing of Ukrainian steelmakers, appeared, first of
all, in increasing production volume, is connected, with privatisation of most
of companies, that resulted in arising more effective owners and growth of
investments in production reconstruction. This refers, first of all, to
Arcelor Mittal Krivoi Rog (AMKR, former Krivorozhstal until 2006), which
expands its production and presence at domestic and world market, as well as
Metinvest Holding (managing metallurgical assets of SCM) and Industrial Union
of Donbas (ISD).
Currently processes of re-distribution of assets is in progress in
mining-metallurgical industry of Ukraine: Metinvest Holding strengthens its
positions; Russian holdings also penetrate into the market, for instance,
EvrazGroup.
View Cart
